How do online casinos detect and prevent money laundering?

Online casinos disguise the origins of money obtained illegally by channeling it through legitimate businesses. With multi-billion dollar revenues, online casinos are an attractive target for money launderers looking to “clean” their illicit funds. However, internet gambling sites utilize advanced technologies and strict compliance procedures to detect and prevent laundering attempts.  The process allows casinos to verify users are who they claim and build a profile showing sources of funds. Ongoing monitoring helps identify suspicious changes or activities compared to a player’s original verified identity. Turning away anonymous users makes laundering much harder.

AI transaction monitoring

Online casinos employ advanced artificial intelligence to monitor all transactions in real time and detect suspicious patterns indicative of money laundering. AI analyzes factors like deposit amounts, requested withdrawals, play duration and style, and more, across an entire network of casino sites. Abnormal user behaviors are flagged for compliance teams to review. False positives are common, but AI helps pinpoint suspicious transactions for further investigation. It serves as an automated watchdog across millions of transactions.

Third-party integrations

Casinos integrate with third-party risk intelligence services that maintain real-time global watchlists of high-risk entities including politically exposed persons, sanctioned countries, known criminals, and blacklisted Bitcoin or credit card numbers. The user-supplied data is screened against these databases to identify customers with red flags instantly continuous monitoring checks for any new designation on watchlists that warrants further scrutiny of transactions.

Funds tracing

For larger withdrawals or activity deemed high risk, online casinos perform fund tracing to determine the complete origin of monies. It involves requiring players to provide evidence of the source of deposits, such as bank statements, cryptocurrency exchange records, stock trading platform invoices, and more. Compliance teams verify these documents are legitimate and match the user’s profile. Tracing the full fund’s trail aims to ensure money is from lawful means only.

Play pattern analysis

Sophisticated systems track each player’s gambling activities to detect irregular play that could signal laundering attempts versus typical behavior. Unusual patterns like minimal gaming before cashing out, avoiding bonus offers, or inconsistent bet sizing relative to deposit amounts, raise red flags. Data analytics identify play anomalies and risky correlations across the player base. Compliance teams then determine if further review is warranted.

Delayed withdrawals

One common technique online kiwi casinos employ when money laundering is suspected is to stall payouts. Rather than rejecting withdrawal requests outright, sites impose delays pending review. This allows time to scrutinize transactions and request tracing evidence from the player. Honest users are eventually paid after compliance sign-off. Only confirmed laundering attempts result in canceled withdrawals after lengthy reviews.

Regulator collaboration

Online casinos work closely with gaming regulators to report and block known suspicious accounts. Special regulatory tools facilitate information sharing across licensees to strengthen anti-money laundering efforts. For example, regulators require all sites to block payouts on accounts deemed illegal operators. Because laundering often spans multiple sites, collaboration between casinos and regulators is key to disruption.